Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) shares were down about 21% today after the company negatively pre-announced third-quarter results, with sales down 14% due to ongoing macroeconomic challenges impacting network spending.

In reaction, Canaccord analyst Michael Walkley reduced his price target to $5.50 (from $7.00), while reiterating a Hold rating on the stock.

Walkley commented, “We believe industry trends will remain weak through 2017 as spending remains challenged in emerging markets where purchasing power in USD continues to erode. Despite weak trends in several markets, we believe China and the United States remain relatively stable with management noting these markets were consistent with their expectations. As a result of the pre-announcement and ongoing weak trends, we are lowering our F’16/F’17 estimates.”

“With continued weak volumes expected in mobile broadband, we expect management will likely increase their cost cutting initiatives beyond SEK9B with additional cost cuts including reducing investments in IP routing. We continue to anticipate soft Network revenue trends through 2017 as 5G investments remain in early stages of development and global 4G spending likely declines over the next several years,” the analyst added.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Walkley has a yearly average return of 14.9% and a 61% success rate. Walkley has a 31.9% average loss when recommending ERIC, and is ranked #30 out of 4183 analysts.

Out of the 15 analysts polled by TipRanks, 14 rate LM Ericsson stock a Hold, while 1 rates the stock a Sell. With a return potential of 41%, the stock’s consensus target price stands at $7.86.

Fortinet Inc

As a result of purchasing patterns, sales execution challenges and macro issues, Fortinet Inc (NASDAQ:FTNT) lowered its revenue outlook to $311 million to $316 million, down from its previous range of $319 million to $324 million, sending shares down 10% today.

In the wake of the disappointing pre-announcement, Needham analyst Scott Zeller reiterated a Buy rating on shares of Fortinet, while slightly reducing the price target to $41 (from $42), which implies an upside of 32% from current levels.

Zeller opined, “FTNT negatively preannounced F3Q16 (September) with lower than expected billings, revenue, and EPS. Recall, there were signs of stress in the JuneQ, namely service provider weakness, discounting pressure, higher DSO, and complications related to the North American sales reorganization. The company cited the reorg as the main culprit for underperformance for SeptQ, with North American Enterprise and Service Provider accounting for most of the shortfall. We note that going into the news, shares closed at $34.09, or 3.1x EV/CY17, suggesting low expectations as we go into earnings. Shares indicated down to around $30, which is 2.7x our lowered EV/CY17 revenue. We believe FTNT remains a good value idea in security given the valuation, its attractive 20%+ billings growth.”

As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. According to TipRanks.com, analyst Scott Zeller has a yearly average return of 6.8% and a 53% success rate. Zeller has a 5.4% average loss when recommending FTNT, and is ranked #529 out of 4183 analysts.

Out of the 22 analysts polled by TipRanks, 14 rate Fortinet stock a Buy, while 8 rate the stock a Hold. With a return potential of 24%, the stock’s consensus target price stands at $38.35.